Robert J. Fedor, Esq., L.L.C.
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Tax Law Blog

Business owners: beware the Trust Fund Recovery Penalty

We've previously discussed some of the red flag actions, or inactions, that are likely to get the IRS's attention. For small business owners, tax obligations are not only financially burdensome, but also confusing leading some to make costly tax mistakes.

In IRS criminal tax cases, the burden of proof is on the government

We talk a lot in this blog about the complexities of U.S. tax codes and how confusion surrounding their meaning and interpretation can spell trouble for a taxpayer. There are also, however, other cases where individuals intentionally sets out to deceive or profit from the IRS. In these types of cases, the burden of proof is on the government to provide evidence that an individual knowingly and intentionally took action to deceive the IRS and personally profit.

IRS criminal charges are serious and carry hefty penalties

They say there are two certainties in life, death and taxes. While the first remains largely an unknown, many Americans have had far too much experience with the later. Tax codes, rules and regulations are notoriously complex and confusing. It's no wonder then that many people make mistakes when it comes to taxes.

U.S. citizens living in Canada oppose FATCA

The full and widespread effects of the U.S. federal government's attempts to crack down on foreign asset and account holders are being felt around the world. The Foreign Account Tax Compliance Act calls upon foreign governments and financial institutions to report and provide information about U.S. citizens with known foreign accounts and assets totaling $50,000 or more.

For entrepreneurs and small business owners, line between personal and professional easily blurred

Starting a business or some type of start-up is a major commitment and the men and women who do so must be dedicated and resourceful. When starting out or expanding operations, entrepreneurs and small business owners must often rely upon bank loans and lines of credit for financing. In addition, these individuals frequently use a large portion of their own personal funds to pay for expenditures and operational costs. In some cases, the lines between business and personal become blurred and finances are co-mingled.

Small business owners fearing criminal tax charges advised to seek legal advice

Small business owners are often credited with serving a vital role in the U.S. economy and providing for both its stability and growth. While small business owners took a tremendous financial hit during the recent recession, many fought back and today continue to thrive and provide vital jobs and services to the communities they serve.

These men and women work hard and often lack the resources to hire a financial professional. Consequently, small business owners often take on roles and responsibilities for which they are not always equipped or trained to handle. Given the numerous hats small business owners attempt to wear, it's no wonder some error when it comes to filing and paying taxes.

Judge considers request for $750 million penalty for tax evasion

State and federal agencies take allegations of tax crimes, including tax evasion, very seriously. In many cases, there seems to be no limit to the efforts spent on identifying fraud and then holding the accused responsible. Agencies including the Securities and Exchange Commission have substantial resources at their disposal and they may direct them all at a person accused of not paying taxes.

This is why it can be so crucial to work with an attorney should you find yourself in a position where you are being charged with tax crimes. The penalties of a conviction can be very harsh, and an attorney can help protect people from wrongful convictions or overly aggressive sentencing. One example of the possible consequences that a person could face involves two brothers convicted of failing to pay taxes on more than $500 million.

Key advice when dealing with taxes and the IRS

Aside from the fact that the word is pretty much synonymous with paying money, taxes are dreaded for another major reason; namely the fact that tax codes are convoluted and extremely confusing. Anyone who's ever attempted to prepare and file their own taxes can likely attest to experiencing some level of frustration and bewilderment. Given the difficulty that many people encounter when it comes to understanding tax rules and restrictions, there are some things that every taxpayer should know.

After Jan. 1, numerous tax-related documents begin flooding one's mail box in preparation for the April 15 tax filing deadline. Many people simply set these documents aside and present them to their tax preparer. It's important, however, to review these documents to ensure for their accuracy. In cases where an error is identified, an individual needs sufficient time to request an amended form from the payer.

Delinquent tax filers and payers advised to take action

Some people are by nature procrastinators. Others have mastered the art of avoidance or plain old ignoring the problem in hopes it will just goes away. In most cases, however, these tactics are not successful. This is especially the case when dealing with the IRS and matters related to filing and paying one's taxes.

While it's tempting to simply ignore the communications embossed with the official IRS seal, doing so doesn’t erase the fact that the IRS knows you owe them money. Delinquent tax filers and payers should do themselves a favor and simply face the music and deal with their tax problems sooner rather than later. The IRS has a long memory and a systematic approach to dealing with delinquent taxpayers which may include the garnishment of wages, liens and even criminal tax charges.

 

When it comes to reporting foreign assets, actions speak louder than words

We've previously provided information related to some of the new IRS requirements concerning reporting the existence of foreign accounts and assets. We also discussed how individuals who fail to comply with these new regulations can own up to and remedy their mistakes by contacting the IRS and stating whether their errors were willful or non-willful. While the preferred, and less expensive, route is to assert that non-compliance with or failure to file a Report of Foreign Bank and Financial accounts was non-willful, or innocent, in nature; proving such may be more difficult than one anticipates.

The IRS does not make a habit of coddling taxpayers. Even though the requirements related to foreign accounts and assets and the filing of FBARs are relatively new, the IRS expects that individuals with these types of accounts and assets will work to become educated and ensure they are in compliance with IRS requirements. Therefore, claiming non-compliance with FBAR regulations was non-willful based upon a defense of ignorance will likely not fly.

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Robert J. Fedor, Esq., L.L.C.
23550 Center Ridge Road, Suite 107
Westlake, OH 44145

Phone: 440-250-9709
Toll Free: 800-579-0997
Fax: 440-250-9714
Westlake Law Office Map

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Robert J. Fedor, Esq., L.L.C.
542 S. Dearborn St., Suite 660
Chicago, IL 60605
Phone: 312-836-9096
Toll Free: 800-579-0997
Fax: 312-697-1384
Chicago Law Office Map